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Sunday, November 01, 2009

More common than not?

SHELTON — - A half-dozen years ago, at the peak of a building boom reshaping the Naugatuck Valley, a hot-tempered developer of strip malls named James Botti boasted that he had enough evidence of small-town graft to "collapse town hall" just by calling the FBI.

"I can do that," Botti said.

Botti had the collapsing part right, the FBI now says. The roof fell in, figuratively. The problem for Botti is that it fell on him after someone else made the call.

On Monday,Botti is scheduled to go on trial in federal court in New Haven after six years of investigation and an indictment, in which he is quoted on the integrity of local government. He is charged with hiding cash and then distributing it among city offices in Shelton to expedite his development projects.

It is small-fee, small-town stuff compared with the string of corruption cases that, over the past decade, sent two of Connecticut's big city mayors, a former state treasurer and former Gov. John G. Rowland to prison.

The backdrop to the charges against Botti was a development boom driven by homeowners priced out of Fairfield County, just to the west. Botti was competing to win local government approvals to do his part to transform the Naugatuck Valley's gritty factory towns into high end suburbs. If the allegations in the indictment are proved, they could besmirch the reputations of several builders and public figures in Shelton, the fastest growing of the rapidly changing valley towns.

Chief among those figures is longtime Mayor Mark Lauretti, who, as misfortune would have it, will wrap up his campaign for a record 10th term just as the trial unfolds. Lauretti is a political power in the lower Naugatuck Valley, a pro-development, anti-tax Republican regularly touted as a future congressman.

Lauretti is neither named nor charged in the indictment. But over the course of pretrial arguments it has been disclosed that he is the mysterious "Public Official #1" in the indictment. Botti is accused of bribing Public Official #1 with cash, benefits and favors. In return, the indictment says, the official used his political muscle to push Botti projects through town boards, in particular the inland wetlands and planning and zoning commissions.

The indictment says Botti began conspiring with Public Official #1 early in 2002, when Botti, through intermediaries, paid for an addition to the official's house. Building records show that Lauretti applied in February 2002 to add an attached, two-car garage and expanded living space to his home.

Coincidentally, it was widely reported about two years later that businessmen pursuing state contracts did free renovation work at Rowland's cottage upriver in Litchfield. Botti was overheard telling an associate that "what the governor did was nothing compared to what was done at" Lauretti's house, according to the indictment.

Within weeks of the Rowland reports, Lauretti wrote Botti a belated check for $19,654, the indictment says.

The indictment refers specifically to two commercial developments undertaken by Botti in Shelton, projects known as Crown Point and 828 Bridgeport Avenue.

Two months after Crown Point was approved in March 2004, the indictment says, Botti wrote a check for $8,925 to a business Lauretti owned "for services purportedly rendered." At the time, Lauretti owned a restaurant in Shelton.

The approval process for 828 Bridgeport Avenue, a Chili's restaurant and two other businesses, was more complicated. The planning and zoning commission signaled its lack of support for the project with a preliminary 4-2 vote against it on June 13, 2006 — even though, the indictment says, Botti packed the hearing with his employees, who supported the development without revealing where they worked.

Both Botti and Lauretti lobbied commission members to turn the vote around, according to the indictment, and Lauretti instructed an unidentified commission member to line up supportive votes and put the project back on the commission agenda. The project was approved a week later, 4-2.

Botti gave three of the commission members gift certificates, and, according to the indictment, provided the fourth with $2,000 for an event Botti held at his business.

Lauretti was "permitted to take cash from Botti's office safe," the indictment says. The amount is not stated, but elsewhere in the indictment Botti is accused of hiding hundreds of thousands of dollars in cash in the safe in violation of federal cash reporting law.

The U.S. attorney's office will not discuss the Shelton investigation or Lauretti's alleged involvement. Prosecutors have not identified him as Public Official #1, but sources with knowledge of the case did when Botti was indicted in November 2008. When Botti's lawyer, William F. Dow III, identified the mayor late last month as a target of the Botti investigation during an unusually forthright hearing in federal court, prosecutors did not disagree.

Lauretti, in an interview, didn't address the allegations specifically, but implied that, eventually, they will be shown to be no more than political muck slung by partisan opponents.

"Over the years I've been accused of many, many things," he said. "Political adversaries have filed complaints with state agencies. The state's attorney investigated a road that we paved. I'm just going to say, which one of these allegations has come true? In 18 years, which one has come true? I'm not going to be the one to answer that. But people down here know the answer.

— - "Historically, I've never interfered with ongoing investigations. I've let them run their course. It's very difficult for me to sit on the sidelines and say nothing. Very difficult. My city is prospering, big time. I do my job. And this whole thing is unfair. It's unfair to me and it's unfair to the city."

Switching to campaign mode, Lauretti said that, in the midst of general economic collapse, he is not raising taxes, not cutting services and not seeking municipal employee givebacks, and he predicted that the value of taxable property in Shelton will increase this year.

"Who else can say that?" he asked. "There is a clear record of consistency in how I've done things. And this is a new level of attack. I think more and more people will become aware of Shelton as time goes on and it won't be this dark cloud that is trying to be portrayed by some."

Chris Jones, Lauretti's Democratic opponent for mayor, also declined to wade into the particulars of the investigation but suggested it may create enough of a distraction to keep Lauretti from governing effectively.

"Right now the question is not about guilt or innocence," Jones said. "The question is: Is the mayor governing the city of Shelton effectively with this black cloud over Shelton?"

Botti declined comment through his attorney.

The silence by federal prosecutors on the subject of Lauretti has led to speculation among the defense bar that the prosecution has been unable to use Botti to implicate the mayor. Two days after Botti was indicted, the U.S. attorney's office charged his 80-year-old father with conspiring to help his son illegally structure cash transactions. The elder Botti has pleaded guilty, but no sentencing date has been set.

Botti is charged with conspiracy to defraud the citizens of Shelton of honest government; bribery; mail fraud; conspiracy to illegally structure cash transactions; illegally structuring transactions; and making false statements to the Internal Revenue Service. If convicted, he could be imprisoned and ordered to forfeit money or property.

On Sept. 22, Senior U.S. District Judge Charles S. Haight Jr. granted a motion by Botti when he ruled that prosecutors will have to try Botti twice: first, on Monday, on charges related to structuring of cash transactions, and later on corruption-related charges. Haight agreed with the defense that the two sets of charges are sufficiently distinct to merit separate trials.

Some of the most intriguing disclosures about the investigation emerged in the pretrial sparring leading to Haight's ruling. Dow asserted that two more well-known southwestern Connecticut developers are unindicted co-conspirators. He said two witnesses have been granted immunity. He said the government obtained orders for two wiretaps that were used "against Lauretti" and that "four or five" people allowed the FBI to record their conversations.

Some memorable remarks are attributed to Botti in the indictment. He once predicted that Lauretti would not interfere with one of his projects because Lauretti owed him money. Elsewhere, he announced that, should Lauretti or any other officeholder in Shelton "interfere" with him, he would blow the whistle on the corrupt activities of "17 developers and a good chunk of town hall."

It was disclosed during pretrial argument in late September that Haight has repeatedly instructed Botti to tone down his language. Prosecutors accused Botti of using intimidation in an effort to influence his wife's testimony at his trial. The couple is divorcing. Prosecutors said they intend to call Botti's wife to testify about her knowledge of his structuring of cash transactions.

Haight also warned Botti after he walked into the Shelton Police Department and made a rude remark about another man. Dow said the remark was allegedly inspired by Botti's concern over his wife's new, live-in boyfriend.

A 20-year member of the inland wetland commission triggered the investigation in 2002 when he called the FBI to express concern about a ruling by the planning and zoning commission. It is Connecticut's first, significant public corruption case since Rowland's sentencing in March 2005.